When hospital and health system outpatient volumes plummeted throughout Covid-19, fears surfaced that many independent groups would not survive.

The local severity of Covid-19 affected how any individual practice fared but ultimately, nearly half of physicians reported no ill effects to their practice due to Covid-19. While it’s true that many independent groups faced reduced volumes and revenue in 2020, the biggest impacts were felt among small, single-specialty and primary care practices. Large and multispecialty groups weathered volume fluctuations more easily, as did groups with capitated arrangements.

Impact on life sciences

In the last several years, life science leaders have increasingly prioritized engaging IDNs and other large institutions as a result of consolidation in the health care landscape. But physician groups are not going away, even after Covid-19. Life science leaders need to understand both who the relevant independent physician groups in their markets are, and how they interact with the rest of the health care ecosystem.

For leaders in the pharmaceutical sector, this means understanding how and when independent groups utilize medical products, and to what extent referral patterns may influence care pathways and product utilization.

For leaders in the medical device sector, this means understanding how independent groups in service lines that have high levels of physician independence and growing ambulatory volumes (e.g. radiology) may shift surgical, medical, or diagnostic market share away from health system customers.

Questions to consider

• How will engaging independent physicians be critical for our future growth and success? Where should we focus our efforts?
• How does our customer engagement strategy differ for independent physician groups versus larger institutions (e.g. IDNs) which employ physicians? To what extent do physicians in independent practices have more autonomy and decision-making power as compared to those who are employed?
• Do we anticipate independent physician groups in our market remaining independent? If not, what does that mean for our customer engagement strategy and who has influence over product use?
• Do we understand the dynamics between independent physician groups and large institutions (e.g. IDNs, health systems) in our markets? How do these dynamics impact where care is delivered and by whom, and how our products are utilized?
• How do product decision-making processes (e.g. P&T, value analysis, clinical guidelines committees) differ amongst independent physician groups versus other types of customers?
• How do the supply chain capabilities of our independent physician group customers differ from our health system customers? How can we provide value beyond our products by helping to streamline our physician group customers’ supply chain operations?
• How do independent physician groups use medical evidence differently than large hospitals or IDNs? Do they value different endpoints or clinical metrics? Is our evidence sufficient to meet their needs?

Covid-19’s impact on physician group finances may have been overstated, but the same is not true about its impact on the national physician workforce. Burnout is more acute and more widespread than ever before, with 71% of physicians reporting burnout as of September 2020. Even if clinicians weren't in the ICU on the front lines of the pandemic, physicians have faced acute isolation, concern for their safety, fear for their families, never-ending change, and financial insecurity they never expected. As a result, a growing number are considering early retirement or even leaving the practice of medicine entirely— moves that would put further pressure on the remaining workforce.

Impact on life sciences

Life sciences’ health care professional (HCP) customers are more burnt out than ever. They’re increasingly declining rep or medical science liaison (MSL) visits due to limited time, bandwidth, and capacity, rejecting both in-person and virtual meetings. It’s increasingly difficult for life sciences reps to share new evidence, information, and wraparound services, while also supporting their customers throughout challenging times. In addition to reducing time spent interacting with life sciences reps, many organizations recognize that their clinical staff don’t have bandwidth to be trained on new product use. During product review, decision-makers will give a similar level of weight to training time associated with a product as they do to a product’s financial or clinical impact.

The HCPs that are meeting with life sciences are starting to demand different-in-kind, personalized evidence and data from reps – information they can’t easily find online or ask their peers in online clinician communities. For example, many HCPs are asking pharmaceutical or device reps for insight into how many of their patients may be eligible to receive a treatment or procedure, or how patients in their area or with specific demographics may respond to different care pathways. Life sciences leaders must prepare to interact with their customers amidst these time constraints and evolving demands for evidence and support, while maintaining empathy as clinicians continue to suffer from burnout.

Questions to consider

• How can we support physicians amidst their burnout and trauma? What resources or services can we provide to help our physician group or institutional partners support their workforce during challenging times?
• What evidence or information about our products, or therapeutic area can we provide that adds value and help physicians amidst their burnout and time/capacity constraints?
• How can we make the most of the limited time we have with physicians? How can we ensure that our medical evidence and/or messaging and value narratives resonate in a shorter period of time?
• Where else are physicians going for quick-hit information, and how can we use those channels to provide additional support?
• How might physician burnout and trauma impact the success of any upcoming product launches? Are physicians in our specialty actively thinking about and preparing for new products or substitutes, or evidence that can change how they deliver care? What points of friction can we reduce to support physicians in using our products?

The physician landscape is more complex than ever, with more partners and models of partnership available. The traditional, binary option of independent shareholder or health system employee is long gone. Even true independent groups don't look like they once did, adapting in ways like receiving funding from a range of investors or adding more employed physicians. Physician groups can now partner with national medical groups, non-equity partners, private equity, health plans, and more.

In particular, private equity is gaining traction as a physician group partner—typically in the consolidation of specialty practices (usually at the national level) or value-based care investments in primary care practices. In return, physician groups get the capital they need to make investments—investments that in theory drive profits for both the physician shareholders and the PE investors.

Additionally, health plans are increasingly adopting a range of strategies to develop their physician strategy and maintain their existing networks. And even cases where plans aren't funding entities themselves, they're thinking of new ways to work with the growing range of physician groups. We predict health plans will move away from a uniform approach to physician practice partnership and towards more multifaceted approaches to appeal to a wide range of providers.

Impact on life sciences

As the independent physician practice landscape evolves, life sciences leaders need to understand the partnership dynamics in their markets. How a practice is owned, funded, and operated can have significant impacts on how clinicians in the practice make clinical decisions, develop formularies and guidelines, use products, manage spend, and deliver care. While increased investments can expand a practices’ opportunities for treatment or product utilization, these new funding models may also put increased pressure on physicians to reign in medical spend and more closely stick to clinical guidelines and pathways that focus on reducing total costs of care.

Understanding how these different stakeholders interact with each other can also provide critical insight into who holds decision-making power in different markets. In the complex physician landscape, life sciences leaders cannot take a one-size-fits-all approach to customer engagement. They must identify where and how their customers operate amidst varying funding and ownership models, and tailor their value messaging and engagements accordingly.

Questions to consider

• Are physician groups in our markets entering into new partnerships and/or transforming their ownership structures? If so, how might that impact their clinical autonomy and/or freedom over product use?
• Are we adapting the way in which we interact with physician groups to recognize changes in ownership structures and/or levels of physician autonomy and decision-making power?
• Are we expanding our customer engagement strategies to reach a more diverse set of physician groups and practices? What new types of physician groups should we engage to advance our organization's goals and target new HCPs?
• Have we adjusted our organizations’ value proposition, evidence, or messaging for each of the physician archetypes we engage?
• Who has the ultimate decision-making power at these different types of organizations? Who are the key stakeholders? Are we engaging the right product gatekeepers?
• How might funding sources influence how physician groups (and HCPs within them) make decisions about clinical care and product use?
• How are we communicating how our products, clinical evidence, and wraparound support services, can make our customers’ practice a more valuable business to external stakeholders that offer funding?

As many independent groups are doubling down on risk-based payment models, they want to partner with organizations who can provide the tools and infrastructure they need to succeed. Across Advisory Board’s research interviews, the number one thing that independent physicians consistently want is access to real-time clinical data for attributed patients. This includes offerings that help them better identify vulnerable populations, enhance information sharing across stakeholders, and support patient self-management. Such data and insight are increasingly critical to tracking patient progress and utilization outside the health system, and may impact performance in value-based contracts.

Impact on life sciences

As independent physicians take on more risk, life science leaders can play a critical role in sharing real-time clinical insight and evidence. Such data can support value-based contracts, help physicians identify eligible patients, understand how treatments or procedures work in different subpopulations, predict long-term outcomes, and provide wraparound support for patient adherence and post-operative care.

While life sciences are already making sizable investments in real-world data and evidence collection, they must consider how to work with physician groups to share customized insight, while leveraging existing data and evidence to prove product value.

Questions to consider

• What real-time clinical data can we provide to support independent physicians in making clinical decisions? What data do we already have that we can share with customers to help them with clinical decision making and product use? What new, tailored analysis or insight can we provide?
• How can we partner with independent physicians for collaborative real-world evidence generation? What are research questions of mutual benefit?
• What endpoints and metrics should we collect that align with independent physician’s value-based contract design?
• Which of our internal colleagues should we work with to identify opportunities for partnerships?